Thursday, November 8, 2012

So What's Next?

Barack Obama will parlay the next four years into another four after that, according to investment analyst Porter Stansberry (speculating here).  He will do this by being the right person in the right place at the right time.

The combination of

rising domestic production of shale oil

expanding global markets in natural gas

will make the U.S. an energy exporter.  That means profits for the producers and transporters--and licensing fees, royalties, and corporate taxes for the federal government.  Don't forget the re-shoring of manufacturing jobs as well.  The new revenues, says Stansberry, will buy Obama (or his proxy) another term.  Or two.

There is a flip side to rampant resource exploitation, naturally.  As Michael Feller opines at Macro Investor:

"The world, if it were a company, would be Enron. Its various divisions have, in the past 100 years or so, delivered blistering rates of growth, but its business model is structurally unsound and there is a massive disconnect between the gains of its executives and the returns enjoyed by all shareholders. Its administration is opaque, its financial measurement is flawed, its environmental record is awful and many of its managers are corrupt, incompetent or both. Some don’t even show up for work. Most of all, however, the world is largely borrowing from its future to deliver returns to the present. And while there’s no small amount of true innovation and genius in the mix, most of this entity’s economic performance, its profit line if you will, has been at the expense of its balance sheet: the earth."
[Full comment here.]

The International Energy Agency has just released its World Energy Outlook 2012, containing projections for global energy flows over the next twenty years.  [Click here for the executive summary.]  The IEA sees 2030 as the break-even year for net energy production in the U.S. 

[update, 11-18-12--]

However, balancing the books in total energy flows is not the same as being oil-independent.  So says this petroleum geologist, who calls the reversal in U.S. oil production "slight"--and not likely to close the present shortfall (with production lagging consumption) of 9 billion barrels per day.  Perception, as his graphs show, is all in the presentation.

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